Costco now sells its own razors — and it’s terrible news for Gillette

Costco is now selling Kirkland Signature razors at a significantly lower price than its Gillette ones.

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Costco is now selling Kirkland Signature razors at a significantly lower price than its Gillette ones.
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Getty/Justin Sullivan

  • Costco is now selling razors through its private label, Kirkland Signature.
  • The kit, which comes with a razor and 14 Kirkland blades, costs $20. It’s about 24% cheaper per blade than the Gillette Mach 3 razor pack Costco also sells.
  • Mark Astrachan, an analyst at Stifel Nicolaus, called the move “modestly negative” for Gillette.

Costco has started selling razor kits under its private-label brand, Kirkland Signature.

The kit comes with a handle and 14 blades, all for $20. It’s about 24% cheaper per blade than the Gillette Mach 3 razor pack the store also sells, according to the Stifel Nicolaus analyst Mark Astrachan (via Bloomberg).

That’s bad news for Gillette, which still sells the most razors in the United States but has been rapidly losing market share to upstarts like Harry’s and Dollar Shave Club. Kirkland’s new razors will have a “modestly negative” impact on Procter & Gamble-owned Gillette, according to Astrachan.

Gillette once claimed an estimated 70% market share in North America but is now somewhere around 50%, The Wall Street Journal reported last year, citing data from Euromonitor. Harry’s and Dollar Shave Club combined for a 12.2% market share in 2016, up from 7.2% in 2015.

Gillette has been taking drastic steps to staunch its bleeding market share in recent years. Last year, the brand cut the prices of its razors by as much as 20%. The average discount was about 12%, and many of its flagship products, like the Gillette Fusion Cartridges, were discounted.

Gillette has previously responded to challenges from competitors with concepts like Gillette On Demand, which mimics the direct-to-consumer models of Harry’s and Dollar Shave Club by allowing customers to either buy blades as needed or build a custom subscription.

Kirkland, Costco’s low-cost private label that encompasses items from groceries to household products to clothing, has become a massive hit for the company since it launched in 1995. Kirkland goods now make up about 20% of the products offered in the warehouse store.